1. PPE Tangible assets held for
use in production or
supply of goods or
services, for rental to
others, or for
administrative purposes
and are expected to be
used during more than
one period
2. 1. tangible / with physical
substance
2. used in business
(production/rental/administrative)
3. expected to be used for more
than one year
major characteristics of
PPE
3. Noncurrent assets Classification of PPE
4. False, they are part of
INVENTORY
T/F Assets held for sale
and for investment are
considered PPE
5. Fixed assets Old term for PPE
6. ppe PPE: land
7. ppe PPE/Not: motor vehicle
8. ppe PPE/Not: land
improvements
9. ppe PPE/Not: furnitures &
fixtures
10. Not PPE/Not: bilogical
assets related to
agricultural activity
11. ppe PPE/Not: building
12. ppe PPE/Not: office
equipment
13. ppe PPE/Not: machinery
14. Not PPE/Not: mineral rights
and mineral reserves
(non-regenerative
resources)
15. ppe PPE/Not: ship
16. ppe PPE/Not: tools
17. ppe PPE/Not: Aircraft
18. PPE PPE/Not: PPE used to
maintain bilogical
assets, mineral rights
and mineral reserves
19. PPE PPE/Not: Book plates
20. PAS 16 Standard used for PPE
21. 1. Probable that
future economic
benefits will flow to
the entity
2. Cost of asset can
be measured
reliably
An item of PPE shall be recognized
when it is?
22. incurred T/F Entity shall evaluate PPE costs at
the time when?
23. Used in more than
one period and can
only be used in
connection with an
item of PPE
When do major spare parts and
stand-by equipment qualify as PPE
24. Inventoried, then
expensed when
consumed
Usual treatment of spare parts and
servicing equipment
25. its useful life or
useful life of related
asset, whichever is
shorter
The spare parts are depreciated over
_________ if they are considered PPE
26. True. T/F PPE may be acquired for safety
and environmental reasons
27. Necessary to obtain
FEB from other
assets in excess of
what it could obtain
if it was not acquired
Purpose of safety and environmental
equipment
28. Cost Amount of cash or cash equivalent
paid and the fair value of other
consideration given to acquire an
asset at the time of acquisition or
construction
29. Cost. Initial of measurement of PPE
30. 1. Purchase price
2. DAC
3. PV/initial estimate
of dismantling and
removal item and
restoring the sit on
which it is located
Elements of cost of PPE
31. present obligation exists when PPE is acquired; or is
incurred as a consequence of having
used the item during a particular
period for purposes other than to
produce inventories during that
period
Chapter 31 Property, Plant and Equipment
Study online at quizlet.com/_2zqpj8
32. import duties
nonrefundable purchase taxes
deduct trade discounts and
rebates
Components of
purchase price
33. import duties tax collected on
imports and some
exports by the customs
authorities of a country
34. 1. Employee benefits arising
directly from
construction/acquisition of PPE
2. Cost of site preparation
3. Initial delivery and handling
cost
4. Installation and assembly cost
5. Professional fees
6. Cost of testing after deducting
net proceeds from selling items
produced e.g. samples produced
upon testing
Examples of DAC
35. Cost; purchase price Expensed or element of
cost: import duties
36. Cost; DAC Expensed or element of
45. Expensed Expensed or element of cost: Administration
and other general overhead costs
46. Cost; DAC Expensed or element of cost: Cost of testing
after deducting net proceeds from selling
items produced e.g. samples produced upon
testing
47. Expensed Expensed or element of cost: Not brought
yet into use or operated at less than fully
capacity
48. Expensed Expensed or element of cost: Initial
operating losses
49. Cost; DAC Expensed or element of cost: Employee
benefits arising directly from
construction/acquisition of PPE
50. Expensed Expensed or element of cost: Cost of
relocation or reorganization
51. Cost; DAC Expensed or element of cost: Cost of site
preparation
52. use either
1. cost model
2. revaluation
subsequent recognition of PPE
